C.Derick Varn: Do you think value theory is an area of Marxism that is particularly under-explored in relationship to class relations? I am thinking of the development of the so-called “Third World” and how understanding “abstract value” can lead one to make predictions about geo-political relationships in the global South?

Matthijs Krul: Value theory is of course not under-explored in Marxism as a whole. Since the 1980s or so there has been a great revival in Marxist economic theory, especially in exploring the nature and implications of Marx’s value theory. But in relation to class, other than purely in the abstract, is another issue. One important problem with much analysis of class in the modern world is that it is taken for granted, as if class relations are the starting point of the analysis, rather than a subject of analysis themselves from the point of view of Marxist economic theory. There is much ado about the precariat, changes from industrial to service work, and things of that kind, but there is not much interest in the history of the development of classes in the 20th century as tests of Marxist economic theory in themselves, least of all value theory. Here is where so-called Third Worldism comes into its own. In the work of e.g. Emmanuel and Amin, but more so in the work of people like Zak Cope, we find a systematic attempt to understand global economic relations as class relations as well as understanding these class relations as being the working out, in concrete empirical history, of more general and abstract Marxist economic theory. In most radical analysis you have either the former — as in William I. Robinson’s theory of the transnational capitalist class — or the latter, as in for example the debates about the bourgeois revolution or the nature of the USSR. But rarely do you have both.

I am not sure I would speak here of predictions, however — it’s more a matter of explanatory value. Keep in mind economic theory is always more general than the reality analyzed, and so we’re dealing with different levels of empirical application. It’s not pure, abstract modeling as in neoclassical economics, but I would not dare say I can predict how the global class struggle will develop. I think there is an ongoing struggle between the divergent tendencies identified by the ‘Third Worldist’ labor aristocracy thesis on the one hand, and convergent tendencies resulting from shifts in global production and the decline of the Western social-democratic consensus on the other hand. Value theory is an indispensable tool to understanding both of these. Without it we’re stuck either in chauvinist assumptions about the significance of white workers, or in purely distributional arguments for global equality of the kind common in Green and ‘alternate globalization’ movements. But value theory is not much more capable of prediction than any other economic theory.

C.D.V.: Are you familiar with Andrew Kliman’s explanation of the current crisis? If you are, what are the implications for the Global South?

M.K.: Yes, I have followed Kliman’s work quite closely. I gave a very favorable review of his defense of the so-called temporal single-system interpretation (TSSI) in refuting the inconsistency attributed to Marx’s theory of value, and I have been very intrigued by the way in which he consistently opposes ‘fixing’ Marx by applying amalgams of Keynesian and other theories to his work, like is fashionable today. His emphasis on the importance of temporality in making sense of capitalism as a dynamic system, and thereby of value theory itself, is really valuable I think.

For our purposes, I think the most important work is his book The Failure of Capitalist Production. As I understand him, his argument is essentially that neoliberalism has not seen a decrease in workers’ total compensation in favor of corporate profits, as is often alleged (although it has flatlined), and that financialization is not the result of a ballooning profitability. On the contrary, he sees the capitalist system as suffering a secular decline in the rate of profit since the early 1970s, and financialization, speculation and debt, as well as the austerity drives we see today, are attempts at overcoming that inherent barrier to the accumulation of capital. But such methods cannot succeed, because contrary to the ‘left’ Keynesian interpretations, Marx’s value theory indicates that the only way out of a capitalist crisis is by restoring the rate of profit, i.e. by destroying large amounts of (fictitious) value, not, as is done by all Western governments today, by means of bailouts and liquidity drives. Those only kick the can down the road, and make the problem for capitalism worse in the long run, by piling up more debt, generating more unproductive speculation, and thereby pushing the rate of profit down further.

One major consequence of Kliman’s consistent application of Marxist economics is the emphasis on opposing purely distributional responses — all these Marxo-Keynesian attempts to ‘stimulate’ by redistributing wealth, or restoring the welfare state, or calling for nationalizations and public investment works. Instead, as Kliman shows, the contradiction of capital means you have to choose between one of two evils: either ameliorate the crisis now by emergency measures of that kind, and suffer a worse one soon, or ride out the storm, with all the attendant unemployment, immiseration, and unfreedom we have seen in the Great Depression and the Victorian age. Neither option is desirable: that’s exactly why capitalism itself is the problem, and must be overthrown.

In terms of the Global South, this does have some implications. Kliman’s work on the origins of the crisis is statistically limited to the US, although very likely to apply (mutatis mutandis) to the West generally. Worldwide, we have seen a decline in capitalist growth systematically since the 1970s, even despite the new capitalist drives in China, Brazil, and so forth. The poor conditions for investment in the West have driven shifts in production to the Global South, but the longer run effect of this will simply be to equalize this already low rate of profit, and eventually to drive it down even further. This is the inherent tendency of capitalism to do through its expansion of capital and technology, and a ‘Luxemburgian’ solution in the Global South cannot be sustained.

This means, to my mind, that the longer run trend is quite possibly more one of convergence than of divergence. Firstly because the capitalist class is more and more losing their incentive for maintaining the social-democratic ‘historical agreement’ with the labor aristocracy in the West, and is thereby actively destroying the legacy of social-democracy and its basis in sharing the loot of unequal exchange. Secondly because the operation of a global law of value, with a longer run global decline in the rate of profit, will generate similar crisis phenomena in the Global South as it has in the Global North, and in that sense, in a very slow but real way the dissimilarities in social position between the Southern working class and the Northern are being overcome. Keep in mind that for the first time in world history, the majority of the global population is now actually urban workers. If we actively oppose the easy, nostalgic social-democratic and Keynesian answers in the West, and focus on attacking capitalist relations of production themselves and not just questions of the 99% and so forth, we may actually have a better basis for internationalism between the North and South in the long run than it seems at first sight. But that social-democratic nostalgia, whether in its left or its ‘social fascist’ form, is of course popular with Western workers in the shorter run. Kliman gives us powerful economic materials for opposing it, even if that’s not his political intent.

C.D.V.: What do you think is the theoretical error that leads to romanticizing Social Democracy?